NPL sales fall at Fannie Mae and Freddie Mac as portfolios shrink

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NPL sales fall at Fannie Mae and Freddie Mac as portfolios shrink


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Sales of nonperforming loans by Fannie Mae and Freddie Mac fell during the past year as the number of delinquent loans on their books continued to drop.

The government-sponsored enterprises sold 18,419 NPLs last year, down from 44,169 the previous year and from 25,612 in 2015, according to the Federal Housing Finance Agency.

That left the GSEs with 90,456 loans that had been delinquent for a year or more at the end of 2017. The GSEs had had 123,653 NPLs on their books at the same time in 2016 and 199,619 at year-end in 2015. The GSEs sold 15% of their NPLs last year, as compared to 22% in 2016.

About 46% of the nonperforming loans sold continue to come from three states: New Jersey, New York and Florida. Goldman Sachs’ MTGLQ affiliate remained the most active buyer of GSE NPLs in 2017, and New Jersey Community Capital continued to be the most active buyers of smaller Community Impact Pools that the GSEs designed to sell to nonprofits.

More than half of the nonperforming loans sold were resolved in 2017. More than 34% of loans went into foreclosure and 21% avoided foreclosure through loss mitigation strategies such as an active permanent modification, short sale, full repayment, or deed-in-lieu.

In addition to continuing to sell NPLs, Fannie Mae and Freddie Mac are selling reperforming loans that had been delinquent but are performing again with current payments. Fannie, for example, is now marketing a more than $6 billion pool of RPLs in conjunction with Citigroup Global Markets. Bids on that pool are due July 10.

Like GSE NPL sales, the RPL sales require buyer to agree to certain loss mitigation requirements.



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